O.C. job growth predicted to outpace nation's, state's

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The Southern California economy will show modest but widespread improvement over the next year, with Orange County and the Inland Empire leading the region in employment gains, according to the Los Angeles County Economic Development Corp.

The forecast, released today, predicts a private sector recovery at the same time as job losses continue in local government. Leading sectors include high-tech manufacturing and services, tourism, entertainment, professional and business services and construction.

California's 9.8 percent rate
remains higher than the U.S. rate of 7.9 percent, but the state is now growing faster than the nation, the report noted. “Having suffered a deeper recession than that of the nation, California has faced a longer road to full recovery.”

Economists Robert Kleinhenz, Kimberly Ritter-Martinez and Ferdinando Guerra wrote the report
, which predicts that statewide unemployment will hold steady in 2013 and dip to 8.9 percent next year.

They noted that Orange County's economy is expanding faster than that of California or the nation. “The near-term outlook is growing better,” they added. “In many ways Orange County, with the collapse of a number of locally based mortgage giants, was hit harder by the financial crisis and the recession than other regions in Southern California.”

Today, the county “is seeing renewed development activity – several long-delayed construction projects are set to move forward.”

The unemployment rate in Orange County peaked at 9.5 percent in 2010. By December 2012, it had dipped to 6.8 percent, the lowest in Southern California.

The LAEDC forecast: 7.1 percent on average for 2013, and 6.5 percent for 2014.

Orange County payroll jobs can be expected to grow by 22,300 jobs in 2013, or 1.6 percent, the report said. The largest gains would be in administrative and support services, leisure and hospitality, construction, and professional, scientific and technical services.

In 2014, the economists said, the county will continue to add jobs. Nonetheless, overall employment will still be 5 percent less than in 2006, or 77,000 jobs.

Explaining the county's lead in the region, the LAEDC noted: “Since the 1950s, Orange County has transformed itself into a prosperous hub for the high-tech, aerospace, manufacturing and tourism industries. Facilitating this transformation is Orange County's well-educated workforce. Over 86 percent of the adult population has a high school diploma, and 34 percent has a bachelor's degree or higher. Quality of life is another attribute in which Orange County ranks high.”

Wallace Walrod, economic adviser to the Orange County Business Council, called the LAEDC report “overall good news, confirming O.C. is recovering. Orange County remains the economic engine leading Southern California's economic recovery, with accelerating job creation in diverse industries. Demand for housing is up, as are housing prices, and new housing construction activity and commercial development are projected to continue to grow nicely.”

On a cautionary note, the LAEDC economists predicted Orange County's manufacturing sector, the source of many higher-paying jobs, will dip slightly this year. They blamed the slow rate of economic expansion overall, as well as a skills gap as machinery becomes more complex.

The manufacturing base in Southern California is the nation's largest. Los Angeles and Orange counties had more than 500,000 manufacturing jobs in 2012. Outsourcing and technological innovation have cut employment, but not value. Statewide, manufacturing output actually grew 60 percent in the past decade, the report noted.

In the hard-hit Inland Empire of Riverside and San Bernardino counties, unemployment has fallen for seven months, to 10.9 percent. Payroll jobs will jump by 2 percent this year and by 2.9 percent in 2014, faster than anywhere in the region, the LAEDC predicted.

The Inland Empire's “worst days of record-setting numbers of foreclosures, plummeting home values and soaring joblessness are gone,” the economists said.

In Los Angeles County, the nation's most populous county with nearly 10 million residents, nearly all major private sector industries added jobs last year. The LAEDC expects payroll jobs to grow 1.7 percent this year and 1.8 percent in 2014. However, Los Angeles “is by no means out of the woods,” the report concluded. “A normal unemployment rate – 7 percent to 7.5 percent – is still years away.”

Over the next two years, California's overall economy should outpace that of the U.S., with growth rates of 3.1 percent this year and 4.6 percent next year, the economists predicted.

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